We’ve been watching Chinese stocks very closely for almost a year now, because the last time the markets all tanked, China led the way.
Since retracing a standard fare Fibonacci amount of their previous losses, Chinese stocks actually put in a top last August, and since have been making an ominous set of “lower highs” – a traditional bearish indicator.
The Chinese stock market rally has stalled. (Chart courtesy of StockCharts.com)
Legendary trader Dennis Gartman commented a few months ago that he was concerned that stocks markets around the world had rallied furiously back to “the box”, then stalled – with “the box” being the aforementioned usual 38-62% retracement of previous losses.
(I’ve never heard a suitable explanation as to why this always happens, other than “it just does”. Which is fair I guess, because it usually does happen.)
It sure looks ominous across the Pacific right now.
You may also enjoy: More reasons the Chinese bubble is bursting.
Our Partners
We publish a free daily newsletter, The Contrary Investing Report, which highlights trading and investing stories that are key to your financial success and survival. Please subscribe here.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.
Pingback: Tweets that mention Chinese Stock Market Turns Down – Leading Indicator for US? — The Contrary Investing Report -- Topsy.com
Pingback: Marc Faber’s China Outlook (It’s Gonna Crash) – May 2010 — The Contrary Investing Report
Pingback: ETF DAILY NEWS » Playing The UltraShort China ETF (FXP) On Marc Fabers Outlook On China
Pingback: CLF (Cliffs Natural Resources): A Perfect Stock To Short — The Contrary Investing Report